The extra cost to an employer for each smoker on the payroll is said to be at least $1,000 annually. That, together with tough proposals sponsored by the Occupational Safety and Health Administration, is persuading small companies to ban smoking from the premises altogether rather than foster it by creating the special smoking facilities that Washington may well mandate.

The decision was particularly tough, however, for Kent Hudson, whose company, $1.3-million software developer Applied Computer Technologies, is situated amid the tobacco fields of Coats, N.C. "Tobacco was the livelihood of generations of my family, and I grew up on a tobacco farm," Hudson reminisces. "But even I couldn't ignore the negative health consequences."

At first he contemplated skirting a showdown simply by not hiring smokers, but he was advised that would be discriminatory. Instead, Hudson has resolved to persuade his smokers to kick the habit. He covers the cost of smoking-cessation programs and concomitant Nicoderm patches up to $1,000 a year per employee and periodically rewards each reforming smoker with $100 for staying off the weed. The employees accumulate the bribes and after six smoke-free months are allowed to pocket them for good. Only three holdouts remain among the company's 38 employees.

So far Hudson has pledged tens of thousands of dollars. But even at that price, cold turkey is the most cost-effective tactic, he estimates. The nation's employers seem to agree: 85% of companies with 50 or more employees have curtailed workplace smoking to a significant degree, up from only 36% in 1986.

For guidance in establishing no-smoking incentives, the American Lung Association provides On the Air: A Guide to Creating a Smoke-Free Workplace ($3.50), a 25-page manual that describes model policies. Also, the association's traveling teaching program, "Team Up for Freedom from Smoking" ($87.50), trains employees to lead on-site smoking-cessation classes. For either, call 800-LUNG-USA.

For unrepentant smokers, no longer will an open window or even a powerful fan do the trick in the workplace. "Interior smoke must not mingle with fresh air" circulating within a building, emphasizes David Mudarri of the Environmental Protection Agency, which is under contract to do the studies that any OSHA rulings will be based on. "It can't seep through grills or under doors. Private offices won't pass the stringent containment standards." What will pass is a room with dedicated ventilation that exhausts directly outdoors.

But indulgence comes dear. (As does housekeeping: OSHA proposes that cleaning crews can refuse to enter smoke-tainted areas.) Retrofitting an office, the EPA estimates, costs from $30 to $50 per square foot. Thus a 100-square-foot room -- big enough for seven smokers -- can burn up $5,000 just to start. Those willing to pay, Mudarri recommends, should consult R. J. Reynolds's 15-page Developing a Smoking Lounge. Call 800-862-2525 for a free copy.

-- Researched by Karen E. Carney

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